All You Need To Know About The New RBI guidelines for Recurring Payments

Recently Reserve Bank Of India (RBI) introduced regulatory changes to enforce one-time e-mandate for recurring payments through cards. It means customers who had set up any standing instructions for recurring payments such as subscriptions bills up to 5000 INR will have to re-authenticate through online payment systems using 2-factor authentication through OTP. However, for a subscription amount above 5000 INR, the customer needs to re-authenticate each time using the 2-factor authentication through OTP. Customers can always decide to pause, resume or cancel such settings. These changes are implemented by banks and payment gateways.

This change definitely created disruptions with payment aggregators and failures on the Zopnote platform also. However, the system is getting stabilized now by rerouting such payments to banks, who have implemented RBI’s new norms on time. As per experts, this could take few more weeks to stabilize. It is a welcome change for customers and good practice and a safer payment system with FinTech companies. This has been introduced to protect customer control on recurring payments and they are notified by banks.

 

This brings good opportunities for subscription-driven services in India and could boost on-demand services moving into subscription-based models also. If you look at communities served by local vendors generally have subscription models to fulfil daily needs, be it a newspaper, milk, water bottles, gardening, car wash and many more. It’s always hard to keep up accurate accounting with subscription changes for products and keeping track of recurring payments for customers. Few customers would make advance payments to avoid frequent bill payments and others would look for setting up standing instructions or e-Mandate for such payments. Zopnote offers subscription service management on its platform for many of its merchants and new system will benefit with a faster collection. Many of its subscribers also express interest to set-up e-Mandate for recurring payments. While such e-Mandate customers form a very small percentage, it is expected to grow as more and more customers find it convenient and safe to use.